The lack of enhanced domestic indexed assets for TIAA-CREF in last year's survey was due to quantitatively managed assets shifting between enhanced indexing and traditional indexing, said Scott Budde, managing director in the investment management division of TIAA-CREF.
"The bulk of our equity assets under management are in one single account, right around $100 billion in assets under management. That account, unlike many of the funds, has all kind of segments. Some of those segments are quantitatively managed," Mr. Budde explained. In the future, these quantitatively managed accounts will be reported as enhanced indexing, he said.
Wellington Management Co. LP, Boston, reported $5.9 billion in enhanced domestic indexed equities as of Dec. 31, after reporting no enhanced strategies for 2002. For the previous year's survey, Wellington included its enhanced domestic equity as part of its active domestic assets, according to a spokeswoman. Wellington managed $4.8 billion in enhanced domestic indexed equities at the end of 2002.
The largest manager of enhanced domestic indexed equities experienced dramatic growth as well.
Barclays Global Investors, San Francisco, reported $569.7 billion in internally managed U.S. institutional tax-exempt assets as of Dec. 31. Of that total, BGI managed $64.4 billion in enhanced domestic indexed equities, an increase of 36.3% over the $47.3 billion reported at the end of 2002. The percentage of BGI's internally managed U.S. institutional tax-exempt assets in enhanced domestic equities dipped slightly, however, to 11.3%, as of Dec. 31, from 11.6% for the previous year.
BGI's dramatic increase in internally managed enhanced assets was due to a combination of new accounts and existing clients shifting their strategies from passive (Pensions & Investments, March 22).
State Street Global Investors, Boston, reported $12.1 billion in enhanced domestic indexed equities, more than doubling their total of $6 billion at the end of 2002. Enhanced domestic indexed equities account for 1.7% of the firm's internal U.S. institutional tax-exempt indexed assets, up from 1.2% at the end of 2002.